NAIAS / Detroit: Forecast: US Market Will Grow 11 Per Cent in
2011 - New Offensive With Hybrids and Clean Diesels

DETROIT and BERLIN, January
10, 2011 -- Statement by Matthias Wissmann, President of the German
Association of the Automotive Industry (VDA), at the VDA press conference
in
Detroit on Monday, January 10, 2011:

The most important
automotive trade show in North America is
taking place at a good time: the US market is benefiting from a tailwind,
and
in the year 2010 the light vehicle market expanded by 11 per cent to almost
11.6 million vehicles. Of course we have not yet reached the record levels
seen before the crisis. But things are moving forward - last year the
citizens of the US sent out a clear signal in favor of the automobile. And
we
have reason to be optimistic about the year just beginning: we expect the
US
market too to grow by 11 per cent to 12.8 million light vehicles in
2011.

US market continues on
course for growth

The German automotive
industry is characterized by the fact
that even during the crisis years it did not make the mistake of
underestimating the significance of the US market. China and its dynamic
growth naturally attracted a great deal of attention, but I am pleased to
note here in Detroit that the US market is still the largest vehicle market
in the world - and in the light of current forecasts I expect this to
remain
so in this new year of 2011.

The US market is of equal
strategic importance for our
companies. Independent of the short-term factors, the long-term growth
indicators in the US are positive: the average age of the population is 37,
which is much younger than that in Germany (44). In addition, the
population
growth of 1 per cent in the United States is significantly higher than in
Germany (+/- 0 per cent).

I said in Detroit at the
beginning of 2009 - and one year ago
I repeated this - we are convinced that in the long term the US market will
resume a path of expansion. Today I can see that my assessment has been
fully
confirmed. And there's more: the motor driving growth is already running at
speed. If we compare the years 2011 and 2009, we find that over this period
the US market will increase by 23 per cent, or 2.4 million light
vehicles.

We should just as clearly
point out the risks. The crisis in
real estate has not yet been brought to an end, and at 9.8 per cent the
rate
of unemployment is still relatively high. The Consumer Confidence Index is
indeed showing positive development, but it is still climbing very
slowly.

However, in 2011 private
consumption may be expected to grow
by 2.5 per cent. In 2010 - after two years of contraction - it already rose
by 1.7 per cent. In 2011 investments will increase by 9 per cent. This year
the USA's gross domestic product will therefore rise by 2.6 percentage
points. And that is more than in most of the EU Member States in 2011.

The year 2010 has shown
that the US remains an automotive
country. In the future its citizens will continue to want and use
individual
mobility. They need automobiles and do not want to do without them. In view
of the renewed price rises at the pumps for gasoline and diesel fuel,
motorists are scrutinizing their fuel consumption more and more closely. In
this area in particular the German vehicle-makers offer tailor-made models
whose fuel efficiency is better than that of any of their competitors.
Furthermore, they rate the best when it comes to safety, quality, comfort
and
vehicle dynamics.

German manufacturers
increase their market share for the sixth
year in succession

We are delighted that we
are able to continue our success
story. For six years now, our manufacturers have continually pushed up
their
share of the light vehicle market, from 5.1 per cent in 2005 to the current
level of 7.6 per cent. Last year alone they increased the figure by 0.3
percentage points and sold 880,700 vehicles on the US market - a rise of
over
15 per cent. What is remarkable is that our growth in market share has
again
come both in the car segment and in light trucks. This means that in 2010
the
German manufacturers once again did better than their competitors.

New record for passenger
car market share - dominant in the
luxury segment

In the car segment in
2010, the German OEMs increased their
sales by 12 per cent to over 667,800 units. This means that they expanded
three times as rapidly as the overall car segment, which grew by a good 4
per
cent to 5.6 million vehicles. In the car segment in 2010, the German OEMs
increased their market share to 12 per cent, a new all time high (cf. 11
per
cent in 2009).

Last year in the luxury
segment, the German brands built on
their dominant position, pushing up their market share to 47.1 per cent
(cf.
45.5 per cent in 2009). "Luxury Cars" - the official name given in Ward's -
is not directly comparable with the segmentation in Germany, as it also
includes models such as the BMW 1, 3 and 5 Series, Audi's A3, A4 and A6,
and
the C and E-Classes from Mercedes-Benz. This means that almost half of all
luxury cars sold in the US in 2010 bear a German badge. At around 400,000
units, six out of ten passenger cars sold by the German OEMs in the US
belong
to this segment. And the German brands are also present in the medium
segment
(VW Passat, VW CC).

Campaign in the small car
segment, too

The German brands are
well positioned in the small car
segment, which now makes up more than one third of the total car sector (36
per cent). Their market share in this segment rose last year by one whole
percentage point to 10.7 per cent. In total nearly 220,000 small cars built
by German manufacturers were sold in the US - an increase of 10 per cent as
compared with the previous year. So one in three German passenger cars sold
in the US in 2010 was in the small car segment.

US sales of
environmentally friendly clean diesel passenger
cars rose by one third

In the case of diesel
passenger cars, the German manufacturers
maintain a dominant position, with 100 per cent market coverage. However,
it
is even more important that US sales of German clean diesel cars climbed by
one third to 55,650 last year (cf. 42,000 in 2009). The German brands are
continually extending the range of diesel passenger cars they have on
offer.
They not only have a strong hold on the luxury segment, but are also taking
an increasing share of the compact and medium classes. This "model
offensive"
will continue to exert its effects in the current year.

Sales of light trucks up
by 28 per cent - numerous hybrid
models

In 2010 we increased our
sales of light trucks to around
212,900 units, which equals year-on-year growth of 28 per cent, and thus
pushed up our market share in the US by 0.3 percentage points to 3.6 per
cent. The light truck market as a whole expanded by a good 18 per cent to
5.9
million units. So we have grown faster than our competitors from the US and
Asia.

One explanation for this
is that the German makers of light
trucks have a large number of models on offer, principally in the segment
that has doubled its share of total registrations over the last five years
to
around 25 per cent (cf. 24.5% in 2010; 13% in 2005): the Crossover Utility
Vehicles (CUV). The Germans are scoring here with their attractive and
fuel-efficient models that are being offered increasingly as hybrids, such
as
the BMW ActiveHybrid X6, the ML 450 Hybrid from Mercedes-Benz, the Porsche
Cayenne S Hybrid and Volkswagen's Touareg V6 TSI Hybrid. Alongside the
pick-up segment, it is the growth in CUVs which has ensured that in the
year
just ended light trucks expanded their share of all light vehicle sales to
51.2 per cent (cf. 47.5 per cent in 2010).

Market share of light
diesel trucks has more than tripled in
two years

In light diesel trucks
also, the German brands are moving into
the passing lane and offering more and more models that are going down very
well on the market. Their share of the overall light diesel truck market
has
more than trebled within the short space of two years, and now amounts to
10
per cent. (cf. 7.3 per cent in 2009; 3.1 per cent in 2008). This rise is
partly the result of factors such as the clean diesel models Audi Q7, the
BMW
X5, the VW Touareg and the GL, ML and R-Classes from Mercedes-Benz.

On the light diesel
vehicle market as a whole (265,000 units)
- that is, cars and light trucks taken together - the German OEMs have thus
quadrupled their market share within only two years - from 7 to 29 per
cent,
reaching the level of 76,650 vehicles. Compared with 2009, our share of the
light diesel vehicle market has gone up by 4 percentage points.

The German manufacturers
have clean diesel models on the
market, which meet the most demanding exhaust standards (BIN 5) in all 50
federal states. Last year the proportion of diesels among total sales of
light vehicles rose slightly to 2.2 per cent (cf. 2.0 per cent in 2009). We
assume that clean diesels will continue to enjoy considerable opportunities
for growth on the US market. And the year 2010 has certainly shown one
thing:
the German vehicle-makers will have an exceptionally large share in this
growth.

The German manufacturers
are, however, not putting all their
eggs in one basket, but are instead pursuing their "broad-based strategy"
for
powertrains both on the US market and in Europe: that is, they are
continuing
to optimize the classical powertrains and at the same time developing
alternative systems. In addition to the clean diesel and direct injection
gasoline engines, here in the US that means above all new models with
hybrid
drive, which are already doing well on the market.

Successful two-pillar
strategy for production: exports and
assembly rose in the US

Last year the German
auto-makers slightly increased their
share of light vehicles built at North American production sites (i.e.
within
NAFTA) and sold in the US, to 29 per cent of their US sales (251,300
vehicles). Another 629,400 units, or 71 per cent, are assembled in European
plants.

The two-pillar strategy
for production, which our
manufacturers are following on the US market, is paying off: US sales of
vehicles built within NAFTA have risen by 18 per cent, and sales of
vehicles
imported from Europe to the US by 14 per cent. Step by step, the German
automotive industry is escaping the effects of currency fluctuations. At
the
same time this development underscores the huge importance of North
America,
both in the global production network and as an export hub.

In NAFTA the German OEMs
increased their assembly volume by 35
per cent to 722,000 light vehicles (435,000 units in Mexico; 287,000 in the
US). The majority of them were exported; over a third were sold in the US.
We
expect that the proportion of vehicles assembled in the US will continue to
increase in 2011, especially as production commences at the VW factory in
Chattanooga, Tennessee. And the other German manufacturers are also
expanding
their presence on the US market. Last year the NAFTA region accounted for
12
per cent of all foreign production by German brands.

Just how strongly the
recovering US market affects Germany as
a production location is shown by the export figures. In the year 2010,
German manufacturers increased exports of passenger cars produced in
Germany
to the US by 44 per cent to 516,000 units. Another 113,400 vehicles from
other European assembly sites were likewise exported to the US.

The US is therefore once
again the second most important export
destination for the German automotive industry (after the United Kingdom
but
still ahead of China). The proportion of all exports of German-branded
passenger cars going to the US amounts to 12 per cent. In terms of value,
the
US actually comes top of the export rankings for the German OEMs (at around
13 billion euro).

One sixth of all
employees work for German manufacturers

The German manufacturers
employ about 25,000 people at their
US plants. Compared with the previous year, that represents a small rise in
the total workforce, of around 1,000. This means that one sixth of all
employees of automotive manufacturers in the US work for a German brand. So
there are 43,000 employees at German OEMs within NAFTA - that is, including
Canada and Mexico. The number of employees at German supply companies in
the
US has gone up by 2,000 to 52,000 - which is one eighth of all employees
working at suppliers in the United States.

Summary and outlook

We expect that 2011 will
be a good automotive year for the
German manufacturers - and this also applies to the US. The conditions for
further growth are in place: we are enlarging our production capacities in
the US and aiming to increase our market share again this year. If we look
at
the volume of the US light vehicle market in 2011 of 12.8 million units in
relation to our market share, we can achieve sales this year reaching the
one-million mark, given the right background conditions.